Public Relations
GROUP PROPERTY INSURANCE SAVES SYSTEM MILLIONS

5/22/2015 - Jackson, Miss.

There is safety, and savings, in numbers.

Several years ago, public universities in Mississippi each secured property insurance policies separately, leading to variances in coverage, deductibles, risk levels and cost. Knowing that, when it comes to insurance, larger pools mean smaller prices, the universities decided there must be a better way. A group of university personnel and staff from the Board of Trustees of State Institutions of Higher Learning collaborated to explore other options.

Seven policy years later, the result is a decrease in premium rates, a decrease in deductible costs and an increase in coverage.

Prior to the implementation of the group program in 2009, the universities were paying an average blended premium rate that was 60 percent higher than current rates and the total insured value (TIV) was only about $2.5 billion. Today, the universities are paying much lower rates on a TIV of $9.8 billion. The system-wide approach to insuring the system's property has saved the universities more than $45 million in premiums alone.

At its meeting held yesterday in Jackson, the Board of Trustees of State Institutions of Higher Learning approved the contract with Affiliated FM Insurance Company and Axis Surplus Insurance Company to renew its property insurance coverage. The total property premium for 2015-2016 will be $5.8 million.

"This is a great example of the strength and value the system provides to the universities and the state," said Dr. Glenn Boyce, Commissioner of Higher Education. "The universities not only receive more coverage for less cost, but they also benefit from sharing best practices across the system."

In addition to lowering the rates paid, the system-wide approach has provided consistency in coverage across all universities. In addition to property and contents, universities also insure against losses to rental, business and tuition income and against pandemics, service interruption and environmental events. The group plan has also helped increase the limits on flood and earthquake coverage.

The system-wide approach also provides savings in the event that a claim is made. The wind deductible for the University of Southern Mississippi's Hattiesburg Campus was reduced from two percent of the value of a potential loss to a flat deductible of $100,000 and the wind deductible for USM Gulf Coast was reduced from 10 percent to five percent.

Insurance broker Willis placed the business. "Leveraging the purchasing power of the entire IHL system has produced significant financial benefits and resulted broader coverage to protect against a range of unique exposures that Higher Education institutions often face," said Mike Honeycutt, senior vice president with Willis. "These results have only been accomplished as a result of the collaboration between all parties involved. Willis is honored to be a trusted risk advisor of IHL and a part of this success story."

Affiliated FM Insurance Company also provides engineers to help assess needs and provide suggestions to mitigate risks. The cooperation between the insurer and the university staff has improved safety on our campuses.

"By utilizing a system-wide approach, we are able to provide better protection of the state's resources at a lower cost," said Dr. Boyce. "This is a win for the state, the universities and the students."

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The Mississippi Board of Trustees of State Institutions of Higher Learning governs the public universities in Mississippi, including Alcorn State University; Delta State University; Jackson State University; Mississippi State University including the Mississippi State University Division of Agriculture, Forestry and Veterinary Medicine; Mississippi University for Women; Mississippi Valley State University; the University of Mississippi including the University of Mississippi Medical Center; and the University of Southern Mississippi.

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